Ron Paul on Social Security

System is broke; allow young people to get out

Q: Is Social Security a Ponzi scheme?

PAUL: Well, I agree that Social Security is broke. We spent all the money and it's on its last legs unless we do something. One bill that I had in Congress --never got passed--was to prevent the
Congress from spending any of that money on the wars and all the nonsense that we do around the world. Now the other thing that I would like to see done is a transition. I think it's terrible that the
Social Security system has the problems it has, but if people wouldn't have spent the money we would be OK.
Now, what I would like to do is to allow all the young people to get out of Social Security and go on their own. Now, the big question is, is how would the funding occur?

Abolish Social Security, but not overnight

Q: Are you still in favor of abolishing Social Security?

A: Yes, but not overnight. As a matter of fact, my program’s the only one that is going to be able to take care of the elderly. I’d like to get the young people out of it, just the younger
generation, because there’s no money there, and they’re going to have to pay 50 years and they’re not going to get anything. I’d take care of all the elderly, all those who are dependent, but I would save the money from this wild spending overseas.

Source: 2008 GOP debate in Boca Raton Florida
, Jan 24, 2008

Let people get out of Social Security; it’s a failure

Right now they’re getting behind because they’re having a 10% to 12% inflation rate and we give them a 2% increase, and they’re really hurting. I don’t want taxes on the Social Security benefits that they receive. I have a bill in that would secure the
trust fund, where none of that money could be spent in the general revenues. So in many ways, the goal would be to get us out of this program that is a failure. It doesn’t work, and is going to bankrupt this country. The only way you can do that is save
enough money, tide the people over, let the young people get out, because they’re going to be paying all these years and they’re not going to get anything. I probably have the only program that would really help the elderly because the money’s not going
to be there. There’s no way these cost-of-living increases are ever going to keep up with their benefits are never going to keep up with their cost of living. They’re decreasing. My program has a better chance of helping them than any other one.

Never voted to spend one penny of Social Security money

Q: You said in 1988 that you would abolish Social Security. You’re OK with Social Security now?

A: I think we need to offer the kids the chance to get out. But right now, if we don’t save the money, we can’t take care of the other.
I never voted to spend one penny of Social Security money. So I’m the one that has saved it. I say take that money--and I say this constantly--don’t turn anybody out on the streets--people we have conditioned--but
I would say take care of the people that are dependent on us. The only way you can do that is cut spending. If we don’t, they’re all going to be out in the street.
Because right now Social Security beneficiaries are getting 2% raises, but their cost of living is going up 10%. A dollar crisis is going to wipe them all out.

Allow young people to get out of the system

Q: What do you think of Social Security?

A: It’s a mess. And it proves that the government is not very good at central economic planning, even for retirement. The money was taken from the people with good intention.
We should do our best to return it to those that have taken it. But we need to allow the young people to just flat out get out of the system. Because, if you have the government managing these accounts, it’s not going to work.

Source: 2007 GOP primary debate in Orlando, Florida
, Oct 21, 2007

Personal retirement accounts allow investing in one’s future

Q: Current estimates for the unfunded liabilities of our Social Security system are as high as $10 trillion. Would you revive Pres. Bush’s attempt to introduce personal retirement accounts as a way to reform Social Security, thus allowing all Americans,
particularly low-wage workers & the self-employed, an investment in their future & ownership in the inheritance they pass on?

Federal government won’t keep its entitlement promises

When it comes to Social Security and Medicare, the federal government simply won’t be able to keep its promises in the future. That is the reality every American should get used to, despite the grand promises of Washington reformers. Our entitlement
system can’t be reformed--it’s too late. And the Medicare prescription drug bill is the final nail in the coffin--costing at least $1 trillion in the first decade alone, and much more in following decades as the American population grows older.

Don’t believe for a second that we can grow our way out of the problem through a prosperous economy that yields higher future tax revenues. To close the long-term entitlement gap, the US economy would have to grow by double digits every year for the next
75 years.

The answer to these critical financial realities is simple, but not easy: We must rethink the very role of government in our society. Anything less, any tinkering or “reform,” won’t cut it.

Comprehensive Retirement Security and Pension Reform Act of 2001: Vote to pass a bill that would raise the amount individuals may contribute to traditional and Roth Individual Retirement Accounts and to 401[k] plans and make pensions plans more portable

Voted YES on reducing tax payments on Social Security benefits.

Vote to pass a bill that would reduce the percentage of Social Security benefits that is taxable from 85 to 50 percent for single taxpayers with incomes over $25,000 and married couples with incomes over $32,000. The revenues that would be lost for the Medicare trust fund would be replaced by money from the general fund.

Create personal retirement accounts within Social Security.

Amends Social Security Act to add a new tax-exempt "Personal Retirement Account Program".

Designates a personal retirement account for each such individual that is funded by deposits from amounts in the Federal Old-Age and Survivors Insurance Trust Fund not otherwise required for immediate withdrawal, and by rollover and other contributions made by eligible individuals.

Directs the SEC to report to Congress on personal retirement account reinsurance.

Amends the tax code to provide for: (1) annual $300 contributions (tax credits) on behalf of each eligible individual to a personal retirement account; and (2) an excise tax on excess contributions to such accounts.

SPONSOR'S INTRODUCTORY STATEMENT: One of the things I have consistently heard from folks back home is the very simple idea that the first part of saving Social Security is making sure that Social Security taxes stay with Social Security.
That is what this bill does because it takes the Social Security surplus, whatever that happens to be, and simply rebates it back to the people paying Social Security taxes, not to go out and fix up the car or buy a refrigerator with it, but instead to go into their own personal Social Security savings account that would be held by a fiduciary like the local bank.

The individual could not get their hands on the money until they turn 65, but they would get a monthly statement and for the first time, because of the private property rights that come with an account like that, for the first time have a firewall created between political forces in D.C. and their Social Security surplus.

LEGISLATIVE OUTCOME: Referred to the House Committee on Ways and Means; never called for a House vote.

Sponsored bill to put Trust Fund into market certificates.

Paul sponsored investing surplus Trust Fund in market certificates

OFFICIAL CONGRESSIONAL SUMMARY: To ensure the integrity of the Social Security trust funds by requiring the Managing Trustee to invest the annual surplus of such trust funds in marketable interest-bearing U.S. obligations, and certificates of deposit in institutions insured by the FDIC, and to protect such trust funds from the public debt limit.

SPONSOR'S INTRODUCTORY REMARKS: Rep. PAUL: The Social Security Preservation Act is a rather simple bill which states that all monies raised by the Social Security trust fund will be spent in payments to beneficiaries, with excess receipts invested in interest-bearing certificates of deposit. This will help keep Social Security trust fund monies from being diverted to other programs, as well as allow the fund to grow by providing for investment in interest-bearing instruments.

The Social Security Preservation Act ensures that the government will keep its promises to America's seniors that taxes collected for Social Security will be used for Social Security. When the government taxes Americans to fund Social Security, it promises the American people that the money will be there for them when they retire. Congress has a moral obligation to keep that promise.

The return of massive federal deficits, and the accompanying pressure for massive new raids on the trust fund, make it more important than ever that Congress protect the trust fund from big spending, pork-barrel politics. I call upon all my colleagues, regardless of which proposal for long-term Social Security reform they support, to stand up for America's seniors by cosponsoring the Social Security Preservation Act.

LEGISLATIVE OUTCOME:Referred to House Subcommittee on Social Security; never came to a vote.

The mission of the Alliance for Retired Americans is to ensure social and economic justice and full civil rights for all citizens so that they may enjoy lives of dignity, personal and family fulfillment and security. The Alliance believes that all older and retired persons have a responsibility to strive to create a society that incorporates these goals and rights and that retirement provides them with opportunities to pursue new and expanded activities with their unions, civic organizations and their communities.

The following ratings are based on the votes the organization considered most important; the numbers reflect the percentage of time the representative voted the organization's preferred position.